Answer length - approximately 100 words

Crystal Ltd has spent $375,000 this year on a project to develop a new range of wrinkle-reducing skincare products. At this current stage of development, it is too early for Crystal Ltds management to be able to predict whether this project will prove to be profitable?

Required:

Explain whether Crystal Cosmetics should recognize this expenditure as an asset at the end of the current financial year. Justify your answer by reference to the asset definition and recognition criteria contained with the Conceptual Framework.